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Summary

INTRODUCTION

All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood … Everyone has the right to take part in the government of his country, directly or through freely chosen representatives … Everyone has the right to equal access to public service in his country.

United Nations Universal Declaration of Human Rights (1948)

The United Nations Universal Declaration of Human Rights stresses that human beings are born free and equal in dignity and rights. Everyone has equal rights to access public services and to take part in the political process and decision-making in their own country. This universal declaration also emphasizes the need for global collective efforts to ensure equal access to social services, free choice of employment, and rights to health and wellbeing and education, among others. Failing to do so can bring about severe consequences to the economy, society and environment, ranging from economic inefficiency and unsustainable growth to poverty and hunger, social injustice and disparity, and environmental depletion. As a result of this universal call, there has been a sharp reduction in global poverty over the last twenty-five years, in which more than a billion people have been lifted out of poverty (World Bank 2018). This global phenomenon is possible due to global economic growth in Asia, including continental giants China and India.

Despite these achievements, the gains from global economic growth have not been shared equally. The world’s richest 1 per cent, numbering 60 million, receive more than 20 per cent of global income, and a select few in the top 0.01 per cent (600,000 individuals, with approximately 1,200 billionaires) have been living extravagant lives (Institute for Policy Studies 2017; Slater 2013). While poverty has declined sharply, inequality has dramatically increased in the same period (Oxfam 2020). Since global resources are finite, resource distribution should be more equal for poverty to be continually reduced, and sustainable growth maintained. Rising inequality erodes the middle class, which is the backbone of society; adversely affects incentives and motivation of workers in sectors that fall behind, thereby lowering labour productivity; hampers investment in human capital because lower income classes do not have access to credit; and, in general, undermines social cohesion (Yap 2013).

Summary

The Chinese language has become one of the most attractive foreign languages—it ranks only second to English in Cambodia. The demand for the Chinese language is driven by the influx of Chinese tourists and investments, especially after 2010 when Cambodia and China signed their comprehensive strategic partnership. China has invested a significant amount of resources in promoting the Chinese language in Cambodia, especially under the cooperation framework of the Confucius Institute, intending to enhance people-to-people ties and project a positive image of China. The Chinese language has become a critical source of China’s public diplomacy and soft power projection.

This chapter discusses the supply and demand of the Chinese language in Cambodia and the relationship between language education and acquisition with the political and social values of the learners. The chapter seeks to understand how language education and acquisition affect Cambodian learners’ perception of China. The research does not aim to provide a comprehensive Cambodian perception towards China—it only targets those who learn the Chinese language. There are two assumptions here. First, there is a relationship between the acquisition of the Chinese language and the learners’ perception of China. Second, the learners play an important role in promoting bilateral ties, especially under social and cultural cooperation. The chapter has three main parts: supply-side analysis, demand-side analysis and learners’ perception analysis.

Research Method

The study uses a mixed research method and data collection to understand the perception of Cambodian learners of the Chinese language towards China, including desk review, semi-structured interviews and an online survey. The online questionnaire includes questions relating to learners’ perceptions of the New Chinese, Chinese investments, the Chinese government, and China in general. The semi-structured interviews also focus on the informants’ perception of these issues. The informants are also Chinese language learners, but they did not participate in the online survey. The online survey and interviews were administered from 1 November 2020 to 10 December 2020.

Concerning the online survey, 250 online questionnaires were sent out to Chinese learners in Cambodia using the snowballing approach. As a result, 87 survey responses were collected.

Summary

INTRODUCTION

China's overseas investments have significantly shaped resource frontiers in Cambodia. Resource frontiers here refer to “spaces of capitalist transition, where new forms of social property relations and systems of legality are rapidly established in response to market imperatives” (Barney 2009, p. 146). Exploiting new frontiers of land and natural resources are the key sources of economic development. The process of economic development is not just about allocating scarce resources but also about obtaining and developing new frontiers of natural resources. In this connection, “frontier-based development is the process of exploiting or converting new sources of relatively abundant resources for production purposes” (Barbier 2011, p. 7). Extractive and productive transformations are the makings of new Asian resource frontiers called “frontier assemblages”, referring to “the intertwined materialities, actors, cultural logics, spatial dynamics, ecologies, and political-economic processes that produce particular places as resource frontiers” (Cons and Eilenberg 2019, p. 2).

Systemic transformation is defined as the drastic changes in social, economic, natural, political and governance landscapes. This chapter provides an initial qualitative assessment of the impacts of Chinese investments on systemic transformation in Cambodia. The chapter has three main sections, namely, enabling factors, perceived impacts of the Chinese investments, and local governance issues. Sihanoukville is used as a case study to demonstrate the impacts of Chinese investments on local governance. It argues that the influx of Chinese investments to Cambodia—in both extractive and productive sectors—over the past decade has shaped resource frontiers in many ways as they generate cross-sectoral impacts on the Cambodian economy, society, environment, politics and governance. Agriculture, manufacturing, infrastructure and tourism are the main investment sectors. While Chinese investments present huge material opportunities, they also disrupt local livelihoods and the environment and transform local governance at varying speeds and magnitude.

ENABLING FACTORS

Foreign direct investment (FDI) plays a critical role in socio-economic development in Cambodia. Peace, macroeconomic stability, political predictability, resource endowment, relatively cheap labour forces, and gradual improvement of investment climate together with governance reforms and gradual economic diversification have enabled Cambodia to attract foreign investments. For instance, at the Government–Private Sector Forum held in Phnom Penh in March 2019, the government laid out new commitments and concrete reforms to reduce the cost of production and logistics (Chheang 2019).

Summary

The year 2020 has been one of survival for millions of Cambodians, especially the poor and the vulnerable, with their livelihoods affected by the COVID-19 pandemic, flash floods and economic sanctions by the European Union and United States. The ruling regime's legitimacy—chiefly measured in terms of economic performance, public service delivery and infrastructure development—is facing pressing challenges as the economy suffers its worst contraction since the establishment of the Second Kingdom in 1993. State capacity, political leadership and social resilience have all been under severe strain. In June the government decided to cut half of its budget in 2021, but it reversed its decision in October and instead reduced the budget by only about seven per cent. The budget for 2021 is about US$7.6 billion, compared with US$8.2 billion in 2020. Moreover, these unprecedented downward socio-economic pressures affect the development trajectory of the Kingdom, including efforts to realize the United Nations Sustainable Development Goals (SDGs) by 2030 and the visions to become a higher-middle-income country by 2030 and a high-income country by 2050.

After the controversial landslide victory in the general election in 2018, the government, led solely by the Cambodian People's Party (CPP), pledged to carry out “serious” reforms under the slogan of “taking a bath, looking in the mirror, cleaning the body, applying treatment, and conducting surgery”. The appointment in 2020 of new, young and dynamic cabinet members to head the Ministry of Justice, Ministry of Posts and Telecommunications and Ministry of Civil Service was applauded, but the results of these reforms are being awaited. Since 2018 the government has made strides in state revenue collection and the capacity of the state to deal with pandemics like COVID-19 and natural disasters. Widespread and systemic corruption, however, remains the most complex public sector issue in need of reform.

It can be argued that Cambodia responded relatively well to the COVID-19 pandemic and the flash floods. With respect to the external economic and diplomatic pressures highlighted by the imposition of sanctions, the government has adopted and promoted a hedging strategy through economic diversification. The government was able to maintain a reasonable degree of public trust. But as the sources of regime legitimacy and the political power bases are becoming more volatile, the government must continuously improve its performance to address legitimacy deficits.

China suffers from a trust deficit in the region, and Southeast Asian countries have adopted hedging strategies, at varying degrees, aimed at diversifying their economic and strategic interests from Chinese investments and influence. Cambodia considers China as an important strategic and economic partner in providing performance legitimacy and as a countervailing force against its immediate neighbours. Cambodia's economic overdependence and power asymmetry have enabled China to exert significant political leverage over the Kingdom, especially on international issues affecting China's core national interest such as the South China Sea dispute. Local communities are discontented with some Chinese investment projects, especially hydropower plants and land concessions, which have infringed on labour rights and environmental protection. Given the public resentment and dynamic changes and transformations of politico-social environment in Cambodia, China needs to address the concerns and issues raised by local communities in order to sustain and enlarge its political and economic footprint. Promoting good corporate governance, as well as social and environmental responsibility, would help.

Summary

After three decades of Doi Moi (Renovation), Vietnam's role in the region has been remarkably strengthened, particularly after its accession to Association of Southeast Asian Nations (ASEAN) and diplomatic normalization with the United States in 1995. Vietnam's foreign policy has been restructured, readjusted and reoriented in response to the fast-changing global and regional geostrategic and economic landscape. With its growing economic and geopolitical weight, Vietnam is gradually becoming an important strategic actor in Southeast Asia as well as the Asia Pacific.

Available studies on Vietnam's foreign policy mainly focus on Hanoi's relations with the major powers, such as China, the United States, Japan and Russia, and its foreign policy towards regional institutions, especially ASEAN. Few studies have been conducted on Vietnam's relations with its smaller neighbours. To fill the gap, this chapter aims to examine Vietnam's foreign policy towards Cambodia and the Lao People's Democratic Republic under Doi Moi.

The chapter argues that Vietnam is incrementally asserting its leadership role in the Mekong subregion by tightening its traditional ties with the two neighbours through comprehensive engagement with a multi-pronged and multi-layered approach, including strengthening political and security cooperation, economic integration, and socio-cultural exchanges. As long as Vietnam can secure its presence and influence in Cambodia and Laos, its foreign policy, especially its hedging strategy against China, will provide better outcomes with greater returns and fewer risks.

The chapter starts by reviewing Vietnam's foreign policy, objectives and approaches towards Cambodia and Laos within the context of Hanoi's foreign policy reforms and its pursuit of regional integration under Doi Moi. It then analyses the achievements, challenges, and remaining issues in Vietnam's relations with the two neighbours.

Vietnam's Foreign Policy: An Overview

Doi Moi, which was introduced in 1986, marked a critical turning point in Vietnam's foreign policy. The end of the Cold War enabled Vietnam to enlarge its strategic space through the normalization and cementing of ties with all major powers, particularly with China in 1991 and the United States in 1995. Vietnam also gained membership in key regional and global institutions, most notably ASEAN in 1995, Asia-Pacific Economic Cooperation (APEC) in 1998, and World Trade Organization (WTO) in 2007. Vietnam has since adopted a robust regional integration strategy in tandem with its domestic economic reforms and bureaucratic capacity building.

Summary

Introduction

Over the last two decades, inflows of foreign direct investment (FDI) to Cambodia has increased significantly, due to its relatively liberal investment law and pace of services liberalization, including the logistics sector. Liberalization of the services sector started soon after the country's accession to the World Trade Organization (WTO) in 2004 through the General Agreement on Trade in Services (GATS) and later in 2007 through the ASEAN Framework Agreement on Services (AFAS). The services sector, accounting for 42.3 per cent of Gross Domestic Product (GDP) in 2015, plays a critical role in socio-economic development through job creation and productivity improvement. Within it, logistics is regarded as a strategic sector for national and regional connectivity, socio-economic development, and poverty reduction.

This chapter reviews Cambodia's economic development and FDI climate, along with its efforts in services liberalization. The chapter also looks at the liberalization initiatives in logistics services and the current state of logistics development and connectivity in Cambodia. Investment in logistics, especially in infrastructure, and enhancing regional connectivity is one of the key areas of national development as it can help to improve the country's economic performance and competitiveness by reducing transactions cost, improving broad investment climate, and promoting international trade.

Investment Climate

As a small economy, Cambodia has been performing well in the last two decades in terms of sustaining high economic performance and reducing poverty significantly. It has achieved a high average growth rate of 7.9 per cent from 2000 to 2015, thus making it one of the fastest growing economies in ASEAN. The poverty rate has reduced from more than 53.2 per cent in 2004 to 13.5 per cent in 2014. Per capita income has increased from US$417 in 2004 to US$1,215 in 2015, making Cambodia a lower middle-income country, according to the classification by the World Bank Group. Cambodia aims to become an upper middle-income country by 2030 and a high-income country by 2050, if it can sustain an annual growth rate of around 7 per cent.

Summary

EXECUTIVE SUMMARY

Summary

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

TheTrends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policy makers and scholars to contemplate the diversity and dynamism of this exciting region.

Summary

INTRODUCTION

China's rising economic and political clout has created both opportunities and challenges for Southeast Asian countries. China's economic cooperation with Southeast Asian countries is multidimensional and multi-layered involving business collaboration, trade and investment, and financial assistance (grants and concessional loans), which are “fused indistinguishably”. Although the Chinese have claimed that their financial assistance has no strings attached, there is a close link between economic ties and political influence. Some regional analysts argue that “China's rise exerts a profound and complex impact on the political, security and economic contexts of Southeast Asia”. A Cambodia expert, Sophal Ear, puts it this way, “Taking the geopolitical interests of China in Southeast Asia into account, Chinese investment does not come free; political and economic strings tie those who benefit to the influence of China.”

Cambodia, a small and less developed country in the region, is largely perceived to be under strong influence from China due to the high level of economic dependency and power asymmetry — some valid, some overstated. China is now Cambodia's top donor and investor. It has strong interest in regional power projection and Cambodia is regarded as a core strategic partner. The analyst David Koh argues “having a strong ally in Cambodia means China occupying a central position on Indochina”.

In addition to economic interests, Cambodia has its own political and strategic calculation and interest in embracing China. Being geopolitically and geo-economically “sandwiched” by two big neighbours, Cambodia has China as a “protector” and counterweight to Vietnam and Thailand. China helps strengthen the legitimacy of the government, under the leadership of the Cambodian People's Party (CPP).

This paper provides an overview on Chinese investment in Southeast Asia in general and in Cambodia in particular. It discusses the perception of Cambodian stakeholders towards Chinese investment and its implications on Cambodia's domestic politics and foreign policy.

CHINESE INVESTMENT IN SOUTHEAST ASIA

The presence of Chinese commerce in Southeast Asia dates back to the third century when official missions were despatched to countries in the South Seas (Nanyang). These missions were then followed by Buddhist pilgrims and later, during the Song dynasty, by traders.

Summary

The July 2013 General Elections was a critical turning point in the modern history of Cambodian political development and democratization. The predominant role of the Cambodian People's Party (CPP) with the long-serving Prime Minister Hun Sen was challenged for the first time in twenty years. The results of the 2013 election illustrated the narrowing political power base of the ruling CPP and the increasing popularity of the opposition Cambodia National Rescue Party (CNRP).

It is the first time the opposition party gained such a strong power base. The popular votes for both parties were roughly equal (CPP received 3,235,969 votes — 48.83 per cent and CNRP received 2,946,176 votes — 44.46 per cent). In terms of seats at the National Assembly, the CPP got sixty-eight seats while the CNRP got fifty-five seats, signifying the narrowing of political gap and the emergence of political power transformation in Cambodia.

2014 was a year full of controversies and complexities but was also a year of hope. There are strong political pressures and impetus to reform state institutions to be accountable to the people. Fruitful reform results are expected if both parties can effectively work together to serve their people and national interests.

Economic growth rate remains high and the current 20 per cent poverty rate is expected to be reduced by 1 per cent per annum. However, bureaucratic capacity, political leadership, good governance and human capital are the main constraints in maintaining high economic growth and promoting socio-economic equity and inclusiveness.

Social dynamics (socio-economic inequality, social injustice, and social trust issues) are posing a serious threat to national stability and well-being. Without efficiently and effectively addressing such social issues, Cambodia may fall into political, social and economic crisis in the coming years. Clean and accountable government needs to be strengthened at both the national and local levels in order to improve the trust between society and state.

In terms of diplomacy, Cambodia has strengthened bilateral ties with Thailand, Vietnam and China. Bilateral relations with Thailand face new challenges after the coup in Thailand in May although both sides are trying to carefully manage ties. Relations with Vietnam have strengthened remarkably especially in economic cooperation although they face certain challenges coming from the opposition party in Cambodia. Relations with China continue to develop fast.

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2 - Cambodia’s Experiences in Addressing Inequality

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4 - Cambodian Perceptions of China: A Chinese Learners’ Perspective

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9 - Chinese Investments and Resource Frontiers in Cambodia: Systemic Transformation

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Cambodia in 2020: Regime Legitimacy Tested

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The Political Economy of Chinese Investment in Cambodia

8 - Vietnam's Foreign Policy Towards its Smaller Neighbours

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9 - FDI, Services Liberalization and Logistics Development in Cambodia

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The Political Economy of Chinese Investment in Cambodia

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Frontmatter

Foreword

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The Political Economy of Chinese Investment in Cambodia

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Cambodia in 2014: The Beginning of Concrete Reforms

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The Political Economy of Chinese Investment in Cambodia

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